Following on a successful launch last year of a budget tablet, Tesco is planning to introduce an Android smartphone by the end of 2014.
Launched last September, the Hudl tablet sold 400,000 units in its first three months and has subsequently sold more than 550,000. With an introductory price of at £119 ($200) but with fewer features than Apple's iPad, the Hudl was designed to compete with Amazon's Kindle and other mid-level tablets. An upgrade, the Hudl 2, arrives this September.
But the surprising news last week was that the U.K's largest supermarket chain plans to introduce a smartphone with specs 'comparable' to Android models such as Samsung's Galaxy S5, albeit again at a cheaper price.
Amazon has found strong success with its Kindle and is also reportedly developing a smartphone. The Nook has underperformed for Barnes & Noble.
Much as Kindle is connected to Amazon.com, Tesco's smartphone, and the Hudl, will include a "T-button" to provide instant access to Tesco's digital services, including online shopping for groceries, banking and Blinkbox, the retailer's on-demand music and movie service. A scan-and-pay option is promised to arrive later this year.
Most don't expect Tesco's smartphone will match the specifications of Apple's iPhone or top-notch Android devices, but similarly to other retailer private label efforts around food, apparel and other categories, a slightly scaled back version may offer some appeal.
Matt Warman, head technology writer at The Telegraph, wrote that part of The Hudl's success was that it "appealed to a market that simply didn't think an iPad was for them. The brand appeal of Tesco cuts through the idea that only a certain kind of geek is interested in the latest gadgets."
Still, the technology learning curve for competing with Samsung, HTC, Apple and others is expected to be steep. Markos Zachariadis of Warwick Business School wrote on Forbes.com, "Breaking into that category directly and gaining the slightest market share is going to be very difficult for new starters like Tesco."
What's the likelihood that private label mobile devices will be commonplace over the next 10 years?